Orange to protest pricing of new French 3G licence

France Telecom Orange plans to lodge a complaint with the EU over its annoyance that the French government plans to offer a fourth 3G licence for around a third of the amount which it had to pay in 2001. The company said that it would strongly contest the licence fee of €240 million, claiming that the French government was effectively providing state aid to the fourth operator compared to the other three holders of 3G licences.

Regardless of this truculent approach, the French telecoms regulator, Arcep, said that the deadline for applications would remain set at 29th October 2009, with the licence being awarded around eight months afterwards.

Arcep said that it would judge the applications based upon nine criteria, but with prominence placed upon the bidder providing 3G coverage for 25 per cent of the population after two years and 80 per cent after eight. The winner will also be measured on its business plan and the ability to support a full network rollout, estimated to require a capex of €1 billion.

Iliad, the parent company of French ISP Free, has confirmed that it would be a candidate for the licence, albeit that a previous bid for the licence by the company was rejected by Arcep in October 2007. Virgin Mobile France has previously suggested that it might be interested in the licence as a joint venture with Numericable, and Egypt's Orascom Telecom recently said it would consider joining a consortium to bid for the licence. Most observers believe that Iliad is the only company able to meet Arcep's requirements for a fourth 3G licence in France.

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